Is Costco Stock Halal?

Costco runs a membership warehouse club model: bulk groceries, household goods, electronics, tires, gas stations, and a growing e-commerce operation, all sold to paying members at thin markups. The core business, buying in volume and passing savings to members for a flat annual fee, is ordinary commerce and raises no Shariah concern on its own. Membership fees, which generated $5.32 billion in fiscal 2025, are a service fee for access to the warehouse and are permissible. The complication sits inside Costco's two largest merchandise categories. "Foods and Sundries" ($109.56 billion) and "Fresh Foods" ($37.99 billion) together made up more than half of fiscal 2025 net sales, and both categories include wine, spirits, beer, and pork products sold alongside permissible groceries. Costco is widely reported as the largest single wine retailer in the United States by volume, which is the source of the compliance concern.

Costco's 10-K does not separately disclose alcohol or pork sales, so any figure here is an estimate built from public research. Using a widely cited approximation, roughly 10% of the combined Foods and Sundries and Fresh Foods categories comes from alcohol and pork products, which works out to approximately $14.76 billion against fiscal 2025 revenue of $275.24 billion. Add $469 million in interest income earned on Costco's cash and short-term investments, and total non-permissible revenue reaches approximately $15.22 billion, or 5.53% of total revenue. This is a meaningfully different profile from a pure technology or pharmaceutical company: the impurity here is not incidental interest income but a genuine slice of Costco's core retail mix, wine and spirits sold at scale, that happens to be interwoven with permissible grocery sales in the same reporting segments.

At 5.53% estimated impure revenue, Costco sits just 0.53 percentage points above the 5% AAOIFI compliance threshold, placing it in the "Questionable" band rather than clearly non-compliant. But the more important issue is that this number is an estimate built on category-level assumptions, not a disclosed figure. Costco could plausibly sit anywhere from the high 3% range (if alcohol and pork are a smaller share of those segments than assumed) to well above 6% (if the estimate understates alcohol's share of a warehouse club known for bulk wine and spirits sales). This is why halal screeners disagree: Zoya calls Costco "Questionable," while Musaffa and Islamicly, which apply a strict binary 5% cutoff rather than a tiered scale, both rate it non-compliant. PureInvest's tiered approach places Costco in the middle category deliberately, reflecting genuine uncertainty rather than false precision.

Costco is not a clean pass the way Meta or Coca-Cola are, nor is it a categorical failure like a conventional bank. Conservative investors who want certainty should treat the alcohol and pork exposure inside Costco's grocery segments as disqualifying, consistent with Islamicly's and Musaffa's non-compliant rating. Investors who are comfortable with PureInvest's tiered "Questionable" framing, and who purify a proportional share of returns, may choose to hold Costco while monitoring the company's category mix; Costco does not report alcohol sales in a way that lets shareholders track the ratio quarter to quarter, which is itself a reason for caution. We recommend consulting a qualified Shariah advisor before treating Costco as investable, given both the estimation uncertainty and the split among major screening services.